Programmed outlines growth strategy

Programmed Maintenance Services
says it is looking to expand its presence in the resources and public sectors after annual net profit dropped by 7 per cent.

The staffing and maintenance services group said it was in a strong financial position to expand its business, and has secured several contracts or letters of intent worth millions of dollar in the government sector.

Programmed on Wednesday posted net profit of $26.2 million for the year to March 31, down from $28.1 million in fiscal 2009.

Earnings before interest, tax and amortisation (EBITA) were in line with Programmed's guidance at $58.9 million.

Managing director
Chris Sutherland
said trading conditions had been difficult with reduced demand for Programmed's services, with the company reducing overheads to mitigate the impact.

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The outlook for the group, particularly in the workforce business, remained cautious.

"We are seeing a general but slow recovery, with leading indicators pointing to increased casual labor demand over the next twelve months, especially by larger organisations," Mr Sutherland told journalists.

"We are already seeing that, obviously in the construction and mining sectors. However small and medium sized businesses have yet to increase their demand for staff and remain cautious at this time."

Feedback from small and medium sized businesses indicated any recovery in labour demand was likely to take nine to 12 months, he said.

Positives in the year came from work associated with the federal government's stimulus spending on infrastructure.

That sector of Programmed's business was boosted by the announcement on Thursday of a $200 million, 25-year contract for facility management of Victoria's Ararat Prison.

More new contracts were possible in public housing projects in Western Australia, Mr Sutherland said.

"It's a sign that across the government sector in public housing, in prisons, justice and all those sort of areas, there are good opportunities for both maintenance and facility and management," he said.

Programmed's strengthening of its balance sheet in fiscal 2009 through an equity raising and debt refinancing also positioned the group for acquisitions in the resources and industrials area.

"We want to get a bigger position in that resources and industrial space and certainly things that would increase our capacity in that space would be interesting," Mr Sutherland said, adding that Programmed had no immediate takeover plans.

Programmed declared a final dividend of six cents fully franked, taking the full year dividend to nine cents, fully franked.